This tweet (archived here) claims that “Kenyans will pay a minimum of Sh2000” to the National Social Security Fund up from “the previous sh 200”. News reports also make the same claim, including The Star.
Background
The National Social Security Fund (NSSF) is a pool of funds where members make monthly contributions towards their retirement benefits. Contribution to the fund is a minimum of 200 shillings but pegged at an average of 5% of one’s monthly income according to the website. This amount is to be matched by one’s employer.
President Ruto, throughout his campaign advocated for the increase of the monthly contributions to Sh2,000. After his win in the 2022 presidential polls the high court halted the plans to have the contributions increased. However, the Court of Appeal quashed the judgment, setting the stage for the government to increase the contributions.
Verification
According to a public notice on the NSSF website, employees earning over 18,000 shillings will be required to remit a maximum of 2,160 shillings with half of this contributed by their employer. The new rates set the contribution at 12% of pensionable wages with the employer and employee each contributing 6%.
Piga Firimbi spoke to NSSF and we were given the following computational guideline:
i) NSSF contributions are subject to two tiers: Tier 1 or Lower Earning Limit (those earning below 6,000 shillings) and tier 2 or Upper Earning Limit (those earning above 6,000 shillings)
ii) Those in tier 1 will remit 6% of their salary to be matched by their employer; for instance, if one is earning 6,000 shillings, they will remit 6% of 6,000 (360 shillings) to be matched by 360 shillings from their employer.
iii) Those in the upper earning limit (tier 2) will be subjected both to tier 1 and tier 2 deductions. If you earn 10,000 shillings, the first 6,000 shillings will be subjected to tier 1 deductions (360 shillings + 360 shillings matched by employer) and a further 6% of the remaining 4,000 (240 shillings + 240 shillings matched by employer). You will therefore pay a total of 600 shillings and an equal amount to be remitted by your employer.
Essentially, Kenyans will pay remittances to NSSF up to a maximum (and NOT a minimum) of 2,160 shillings.
Verdict
The claim that Kenyans will pay a minimum of 2,000 shillings monthly is INACCURATE.
Add comment